Bitcoin bumpy ride might be over soon as potential pre-halving rally nears

Bitcoin, the top cryptocurrency by market capitalization, is seeing a volatile 2023, with its monthly returns fluctuating from highs of 39.83% in January to lows of -11.53% in August, based on FXStreet calculations. Historical data suggests Bitcoin's cyclical nature with a strong Q4 ahead. So, if history is meant to repeat itself, investors can brace for a rally before the upcoming 2024 halving event scheduled for April. 

Also Read: Best period to invest in altcoins is 6-10 months prior to the Bitcoin halving, that's now; analyst says

Bitcoin's quarterly performance paints an optimistic picture  

An analysis of Bitcoin's monthly returns shows a strong quarterly performance ahead in 2023. Calculations by FXStreet show that Bitcoin has exhibited average monthly returns of 6.20% in quarter one, 30.49% in Q2, 4.21% in Q3 and 93.38% in Q4 over the last decade. These figures suggest Bitcoin tends to gather upward momentum before the year concludes, with another potential halving rally. 

Average quarterly Bitcoin returns between 2013 and 2023

Looking at average monthly returns, traditionally September has been the worst month with negative returns, with October and November expected to push an uptrend. The last quarter for 2023 also precedes the 2024 Bitcoin halving event, scheduled for April. 

Based on Rekt Capital analysis of Bitcoin's pre-halving behavior, particularly in 2015, the 189-day period leading up to the 2016 halving offers takeaways for investors considering Bitcoin is approximately 200 days away from the next halving. As per the analysis, the ‘Pre-Halving Period’ could see a Bitcoin price decrease before a 're-accumulation' range takes over. A ‘Pre-Halving Rally’ creates a local top from the buying before a ‘Post-Halving Parabolic Uptrend,’ when the price rises very quickly, as per the market researcher. 

Bitcoin creates 'lower high' as crypto market is muted 

The global crypto market was mute on Monday, with major cryptocurrencies recording minor losses in the 24-hour time frame as a risk-off mood prevailed among investors. 

At the time of writing, Bitcoin is hovering around the $27,500 mark, which represents a decline of nearly 60% from its record-breaking peak of $69,000 achieved in November 2021.

Rekt Capital has emphasized that, notwithstanding the favorable macroeconomic indicators, Bitcoin has recently established yet another 'lower high' on Monday, a potential bearish sign. 

Meanwhile, Binance CEO Changpeng Zhao, known as CZ, recently cautioned against expecting an immediate doubling of Bitcoin price the day after the halving. However, CZ said that the year following the halving often sees multiple all-time highs. The prediction is similar to Rekt Capital’s ‘Post-Halving Parabolic Uptrend.’

Therefore, short-term fluctuations may persist, the historical data and market experts infer a positive trajectory for Bitcoin as it approaches the 2024 halving event. Investors should keep a watchful eye on the accumulation phase, and expect a pre-halving rally in the run-up.